SINGAPORE - Asia's 0.5% very low-sulphur fuel oil (VLSFO) snapped declines on Wednesday, rebounding from multi-month lows hit in the previous sessions when expectations of rising arbitrage supplies weighed on prices.
The front-month time spread climbed to $2.50 a tonne on Wednesday, up from a near three-month low of $1.75 on Tuesday, Refinitiv data in Eikon showed.
Similarly, the front-month crack rebounded to $11.74 a barrel above Dubai crude, from Tuesday's four-month low of $10.68 a barrel, the Refinitiv data further showed.
Fuel oil inventories in the Fujairah bunkering and storage hub fell 4% to a near three-year low in the week ended Sept. 27, data released on Wednesday showed.
Firm exports to Asia and steady bunkering demand weighed on Fujairah inventories, which marked three straight weeks of declines, trade sources said.
FUJAIRAH STOCKS
Fujairah Oil Industry Zone inventories for heavy distillates and residues fell by 256,000 barrels, or about 40,000 tonnes, to 6.72 million barrels, or 1.06 million tonnes, data via S&P Global Platts showed.
Fujairah's fuel oil inventories were 34% lower than year-ago levels.
According to assessments by Refinitiv Oil Research, exports from the UAE jumped to 528,000 tonnes in the week ended Sept. 26, up from 311,000 tonnes from the prior week.
Philippines' largest oil refining and marketing company, Petron Corporation, chartered the Suezmax Olympic Flag which loaded 130,000 tonnes of fuel oil at Fujairah and departed for Manila on Sept. 26, according to Refinitiv Oil Research.
TANKERS
The global oil tanker market faces another year of low earnings as the COVID-19 pandemic and vaccine inequalities disrupt demand and producers limit output of crude, a shipping analyst said on Wednesday.
Despite a patchy recovery in global oil demand and some easing of output cuts, tanker shipping rates still have a way to go, analysts said.
"We need to look towards another 12 months of fairly low earnings," Peter Sand, chief shipping analyst at shipowner association BIMCO, told the annual Platts APPEC 2021 conference.
"Most likely, in the loss-making region, meaning that VLCC will make less than $25,000 a day on average for the next year or so."
New virus variants and outbreaks in regions crucial to oil demand growth limit tanker demand growth, he added.
(Reporting by Roslan Khasawneh; editing by Uttaresh.V) ((roslan.khasawneh@thomsonreuters.com; Reuters Messaging: roslan.khasawneh.thomsonreuters.com@reuters.net))
